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Fiscal Research Division
Fiscal Brief
Revenue Outlook and Finance Overview
Economy and Taxation
Finance Committee
2015-16 Fiscal Year Highlights
November 2, 2015
The North Carolina General Assembly House and Senate Finance Committees develop and recommend changes to State tax law. This fiscal brief highlights the tax law changes enacted during the 2015 Session.
ActualActualEnactedEnactedFY 2013-14FY 2014-15FY 2015-16FY 2016-17Personal Income10,27211,07911,42011,896Sales and Use Tax5,5656,2526,7077,031Corporate Income Tax1,3571,3281,082858Other Revenue Sources12,9552,7892,5402,576Total$20,150$21,448$21,749$22,3601 "Other" includes taxes and non-tax revenue sources.Actual and Projected General Fund Revenue Sources Since FY 2013-14 1 ($ in Millions)
Actual revenue collections for FY 2014-15 were $446.9 million above projections, predominately due to higher income tax payments and lower refunds from the 2014 tax year.
The actual collections amount triggered the G.S. 105-130.3C mandate that the Corporate Income Tax Rate be reduced if total revenue collections exceeded $20.2 billion in FY 2014-15; thus, the rate will drop from 5% to 4% in 2016.
The State revenue outlook for the 2015-17 biennium anticipates continued moderate, steady economic growth. Nonetheless, given persistent wage growth weaknesses and ongoing global economic instability, the forecast continued the cautious approach of recent years. At no time during the biennium are baseline tax revenues (i.e., collections adjusted for tax rate and base changes) forecast to grow faster than the long-term average of 5%, even though tax revenue growth is often above this level in an expansionary economy.1
S.L. 2015-241, 2015 Appropriations Act (H.B. 97), as amended by S.L. 2015-268, General Government Technical Corrections (H.B. 259) and S.L. 2015-264, GSC Technical Corrections 2015 (S.B. 119) decreases FY 2015-16 General Fund availability by $74.7 million. S.L. 2015-259, NC Competes Act (H.B. 117) further reduces General Fund availability by $7.1 million in FY 2015-16.
During the 2015 Session, the General Assembly made significant tax law changes through the passage of five legislative acts:
• S.L. 2015-241 (H.B. 97), the 2015 Appropriations Act;
• S.L. 2015-259 (H.B. 117), NC Competes Act;
1 Average baseline growth since FY 1994-95 calculated by Fiscal Research Division.
Personal Income52%Sales & Use31%Corp. Income5%Other12%Tax and Non-Tax General Fund Revenue SourcesFY 2015-16$21.75 Billion

Fiscal Research Division
Fiscal Brief
Revenue Outlook and Finance Overview
Economy and Taxation
Finance Committee
2015-16 Fiscal Year Highlights
November 2, 2015
The North Carolina General Assembly House and Senate Finance Committees develop and recommend changes to State tax law. This fiscal brief highlights the tax law changes enacted during the 2015 Session.
ActualActualEnactedEnactedFY 2013-14FY 2014-15FY 2015-16FY 2016-17Personal Income10,27211,07911,42011,896Sales and Use Tax5,5656,2526,7077,031Corporate Income Tax1,3571,3281,082858Other Revenue Sources12,9552,7892,5402,576Total$20,150$21,448$21,749$22,3601 "Other" includes taxes and non-tax revenue sources.Actual and Projected General Fund Revenue Sources Since FY 2013-14 1 ($ in Millions)
Actual revenue collections for FY 2014-15 were $446.9 million above projections, predominately due to higher income tax payments and lower refunds from the 2014 tax year.
The actual collections amount triggered the G.S. 105-130.3C mandate that the Corporate Income Tax Rate be reduced if total revenue collections exceeded $20.2 billion in FY 2014-15; thus, the rate will drop from 5% to 4% in 2016.
The State revenue outlook for the 2015-17 biennium anticipates continued moderate, steady economic growth. Nonetheless, given persistent wage growth weaknesses and ongoing global economic instability, the forecast continued the cautious approach of recent years. At no time during the biennium are baseline tax revenues (i.e., collections adjusted for tax rate and base changes) forecast to grow faster than the long-term average of 5%, even though tax revenue growth is often above this level in an expansionary economy.1
S.L. 2015-241, 2015 Appropriations Act (H.B. 97), as amended by S.L. 2015-268, General Government Technical Corrections (H.B. 259) and S.L. 2015-264, GSC Technical Corrections 2015 (S.B. 119) decreases FY 2015-16 General Fund availability by $74.7 million. S.L. 2015-259, NC Competes Act (H.B. 117) further reduces General Fund availability by $7.1 million in FY 2015-16.
During the 2015 Session, the General Assembly made significant tax law changes through the passage of five legislative acts:
• S.L. 2015-241 (H.B. 97), the 2015 Appropriations Act;
• S.L. 2015-259 (H.B. 117), NC Competes Act;
1 Average baseline growth since FY 1994-95 calculated by Fiscal Research Division.
Personal Income52%Sales & Use31%Corp. Income5%Other12%Tax and Non-Tax General Fund Revenue SourcesFY 2015-16$21.75 Billion